Kerry Group dairy sale talks break down

In February, the group announced it was conducting a strategic review of its dairy-related businesses in the UK and Ireland, while looking for potential buyers of some of its assets.

The potential buyer was identified by the Irish Times ​as its main shareholder Kerry Co-op and would have seen the legacy business spun out into a joint venture (JV), with the co-op taking a 60% share.

In a statement, Kerry Group said: “While the strategic review continues, there is no certainty that this will lead to a transaction and a further update on the strategic review process will be communicated later this year.”​

Disparity in value ​

Julian Wild, corporate finance direct at Rollits argued that talks broke down due to a disparity in the value Kerry Group put on the business and assets compared to the valuation placed by the Co-op.

“There will also be other contentious issues around the running of the JV, such as future dividends and the way in which the new company is financed,”​ he continued.

“It would seem that the discussions have seriously broken down and may be hard to resurrect if both parties have taken a robust position. ​

“That would leave Kerry Group to look elsewhere for a buyer, which in the current climate seems a tall order.”​

Future of its food businesses​

Kerry reportedly approached the Bank of America to help advise on the future of its food businesses while it focused on its Taste & Nutrition division.

However, the sale of Kerry Group’s chilled meat and convenience meals businesses would be unlikely to reach the ‘billions of Euros’ the manufacturing is reportedly selling them for, according to an industry expert.​​

Meanwhile, the Abergavenny Fine Food Co has been acquired by The Frostkrone Food Group​​ - the latest UK acquisition by the German company.